The annual cost of living adjustment for 2023 dipped by nearly a percentage point from the estimated 10.5% forecast last month based on the latest consumer price index data released today, according to a new report.
According to estimates from the Senior Citizens League (TSCL), a nonpartisan seniors group, the new CPI-W data through July shows the COLA for 2023 will be 9.6%, based on the Bureau of Labor Statistics data, which showed that the CPI index rose 8.5% from a year ago, a slowdown from the 9.1% in the June report. The increase would be the highest since 1981.
The projected increase in the COLA would add $158.98 to the average retiree benefit of $1,656, Mary Johnson, a Social Security policy analyst at TSCL, said. She added that if inflation runs “hot” or higher than the recent average, the COLA could be 10.1%. On the other hand, if inflation runs “cold” or lower than the recent average, the COLA could be 9.3%.
The Social Security Administration is expected to announce the COLA in October after the release of the September consumer price index data, Johnson noted.
She said because inflation has outpaced the 5.9% COLA that Social Security beneficiaries received this year, “a high COLA will be eagerly anticipated to address an ongoing shortfall in benefits” that they are experiencing. “Based on inflation through July, we calculate that a $1656 COLA benefit is short about $58 per month on average and by a total of $373.80 year to date."
Johnson said that seniors are struggling to make ends meet. She cited a recent TSCL seniors priority survey that showed that 37% of seniors reported they received low-income assistance in 2021. That, she said, is more than double the 16% receiving needs-based assistance prior to the pandemic, as reported by the U.S. Census Bureau.
She further also noted that the higher COLA has its downside for the millions of older and disabled Social Security recipients “who are at risk of experiencing low-income assistance benefit trims when the COLA boosts their Social Security income by 9.6% in 2023.” She added that with the 5.9% increase this year, 14% of the 2,557 survey participants indicated that their low-income assistance was reduced and another 6% reported losing access to one or more programs altogether when the COLA boosted their income over the limit.